The Cold Shiver of Not Giving Enough: On the Social Cost of Recycling Campaigns

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Summary

Governments sometimes try to increase individuals' contributions to public goods through appeals to consumer responsibility, rather than by economic incentives, for example in recycling campaigns. Using standard consumer theory, one would hardly expect such campaigns to work at all; but if consumers are motivated by norms, appeals may work through changing consumers' perception of the norm requirement. However, increasing voluntary contributions through appeals may come at a social cost. The reason is that appeals work through imposing a heavier (perceived) responsibility on consumers. This represents a welfare loss, which is not necessarily outweighed by “warm glow” benefits.